Entrepreneurs are fascinating people who have great ideas and the motivation to bring new products to the market. Without them, what would our society even look like?
But what we are up against is another story. There are numerous challenges and pitfalls that face small businesses.
In essence, running a successful product-based business comes down to one thing: inventory. Without it, you have nothing to sell and no customers. The more seamless this process appears to customers, the better.
So you have an idea for a product. In fact, you’ve been thinking about it for a long time. Perhaps you’ve already made yourself a working prototype. Now you are ready to share with the world.
You probably know it is going to be a lot of work, but that is okay - you are up for the challenge. But some of the challenges you'll face are ones that customers will not understand, and you may not even see coming.
None of those steps are "easy", except for maybe #s 1 and 2.
Depending on how complicated your product is and how many components it has, your path to perfection can be long and hard. Do you know how many buckle choices there are out there, and that some have cold weather ratings while others do not? Do you even know where to source all buckle options so you can at least compare them?
Meeting Challenge #3 head-on
Dealing with Complexity.
Over the last 5 years, we have found a lot of great people to help us with sourcing, advise, and we’ve made mistakes that have taught us along the way.
Just a small sampling of the decisions we needed to make for the Hoboroll:
Are you bored of reading my list yet?
You can imagine as the complexity of components grows this task gets harder. Making a mug with 1 material (ceramics) and some paint is easy. I cannot even imaging trying to design and make a pair of binoculars!
These seemingly small things are the decisions that HAVE to happen before the rest of your business can even start. That meaning graphic design, packaging, creative marketing, and of course, selling!
By hiring the right people and asking the right friends for advice, we were able to get through all those “little” decisions and start finding a system that worked for us. We decided to use the same fabrics and components across our stuff-sack line, as that is easier on manufacturing. We decided to perfect the Hoboroll before introducing new products.
Defining our market.
For us, it is the REI world. We want quality products that last a lifetime. We want a brand that will continue to grow and help bring adventure to travelers. We want a brand you can rely on, no matter where you are.
We need to compete with serious quality players to even get noticed. The bar is higher, and it means we need top components, top construction, yet still be price competitive- it's almost an oxymoron.
Gobi Gear has been in business for over 5 years now. Through hard work and paying attention to our customers, we have #1-3 pretty much figured out. And we thought we had #4 and #6 figured too... until this past spring.
In theory, once you get your business to #4, things should get easier. But in practice, they can actually get much harder.
It is the first time things are no longer in your control. Up until this point, you have been able to make changes, tweak designs, and have had the freedom to pick whatever factory and vendors you wish.
But once you have a factory, and send them a down-payment, it becomes a lot harder to maneuver. Then once production starts, you are really not in control anymore. If all goes well, it is smooth sailing and you can sit back for a little bit while other people go to work for you. But if not, the headaches are yours.
It sounds like we know a lot about this stuff. After all, we have 5 years of experience to lean on, from making the wrong decisions here and there, having industry experts helping out, to having this summer be our 3rd production run, you'd think we'd have it all figured out.
But we still get thrown under sometimes. Remember I said that the more seamless all of this appears to customers, the better? Well here I take a gamble and lift the veil. I would like Gobi Gear's story to be a cautionary tale to others.
Two large issues came up for Gobi Gear late 2015/early 2016, just as we were ready to place the order for our 3rd production run and fulfill our successful Kickstarter Campaign for the SegSac, our latest product.
All good at first
I thought I had a great factory. It worked for the Hoboroll Kickstarter production run in 2015. The owner lives here in the USA, so I can call him during working hours and speak English (this is a huge plus, just trust me).
They delivered on time, their price was decent, and the quality was what I considered to be excellent.
A bit downhill
Then they delivered some shoulder straps to us and the packaging was a complete mess. The cardboard sleeve was not adhered to itself correctly, and that meant hours of manual labor for us to fix.
Warning bells going off. I then got another price quote shortly after and it was half of what our factory had charged us.
Then I couldn’t get a solid price quote for the SegSac (or new Hoborolls) for months. I do not know why it was so hard. There was lots of “tell me what price you need”.
Also, I kept asking for things in writing, so I had proof of it later and could remember all the details. The owner liked to call me instead of replying in an email.
Finally we did get pricing, and that is when we ran the campaign, figuring that at least if we had agreed on pricing and specs of the bags, we would be all set, given some personality differences (it happens in business).
The final blow
This factory took another small business/entrepreneur to court and sued them. Not the other way around. The factory sued the entrepreneur. There apparently were some miscommunications between who was paying for what, goods not being released from the Port, and I don’t know all the details, but it was enough for us to say, NO WAY. That is not cool.
Back to the drawing board
This happened as our campaign ended. Naturally, we scrambled and kicked it into high gear to find another factory. We interviewed 3, came up with the best one.
While that process went very smoothly, to be honest, it still took almost 3 months of back and forth. Remember, I do not have someone on the ground in China. So I send samples snail-mail. Then they have to get made into what are called “counter samples” - essentially their version of the sample, and sent back to me. Then price quotes. Then negotiations, as always. Good thing I had most of my specs picked out, from thread stitching spacing to fabric.
If I thought the factory issues would lose me some sleep, I had no idea what was coming.
Choosing fabric – took some time, but not a big deal.
We spec’ed out the fabric we wanted: Cordura brand, ultralight, ripstop 30D nylon with a slight waterproof coating. This is the MOST important thing about our bags is the fabric. I was very serious about this.
This fabric is expensive, and I was told that “we can find something cheaper that is not name brand but of equal quality”. As a maker, you always need to watch the bottom line. Since the new factory’s prices came in higher than my previous one’s, the thought of some savings was very appealing.
However, the samples that were sent missed the mark. The first bag ripped right away, and the other swatches were just not up to par. We chose Cordura.
So, another month gone by now. Okay, worth a try through! I do not regret that month delay. Eventually we did get comparable samples, but the price was either the same or higher than Cordura, and thus again, happy with our choice in fabric.
Choosing the fabric mill – when the trouble really started.
We choose the mill that had the best English, pricing (after much negotiating), and communications. They sent us samples when asked and gave pricing when asked.
Typically, fabric griege is 45 – 90 days in the making. So you place your order, it can be up to 3 months wait to get the fabric (then the factory has to make the bags, so you can see, this takes a while). Given the delays due to factory issues, we wanted a fast fabric turn-around.
One of the biggest draws to using HMG was:
We jumped on this opportunity:
And then they give it away….
And so there we were. Thinking we were going to be just a 2-3 months behind schedule – not bad given the issues, and now it was looking like a lot more.
Remember I said I like to point out when it’s embarrassing for a producer to not keep their promises? Well that is what I did, and reminded them of our growing future.
More pressure, more back and forth, we were able to get an advance of 5000 yards, which will take 45-days instead of 3 months. So, bags will be late, but not as late as we originally feared. They are doing a small production run JUST for Kickstarter backers and those pre-order website customers. The rest of the product gets delivered in October.
So, we worked hard, accepted our fate to some degree, and will continue to push forward, knowing that these issues arise for us. The best we can do it hope our customers understand that we are only human :-)
Thanks for reading!